Memphis Tennessee Bankruptcy Blog

Your fiancé, Jim, is a wonderful human being: even-tempered, thoughtful and kind to children and animals. He is a hard worker, too, but there is one concern: Jim is deeply in debt and about to declare bankruptcy.

You have a fine career and a sterling credit rating. You cannot help wondering how Chapter 7 is going to affect your marriage and your own financial future.

If you, like many residents of Tennessee, are finding it increasingly difficult to stay on top of your finances, you may be seeking solutions that could potentially help you get your life back on track. Bankruptcy, for example, is one method many people consider when they seek a fresh financial start, but there is a lot of misinformation out there about it that can prevent some people from taking the first step. At McElroy & Associates, we recognize that there is a lot of common misconceptions out there about the bankruptcy process, and we have helped many clients separate fact from fiction and find solutions that meet their needs.

Per Nerdwallet, one of the most common misconceptions about filing for bankruptcy is that, in doing so, you must acknowledge some sort of personal failure. Bankruptcies have become increasingly common, however, for two primary reasons. First, the majority of people who file for it are struggling with overwhelming medical debt. Second, wages are not rising alongside medical deductibles, leaving many hard-working Americans with limited options.

If you are not familiar with bankruptcy, there are probably many small frustrations associated with the process that you do not know about. For example, you may not realize the extent to which Tennessee courts deliberate on their decisions, slowing down the relief of debts. 

However, it is not usually the lack of speed that frustrates most people who declare bankruptcy. This is because, in some situations, this arduous process represents a welcome change in a debtor's daily life: silence from persistent collection agencies.

If you, like many others across Tennessee, are facing overwhelming debt, you may be weighing your options in an effort to figure out what might help you get back on your feet. In some cases, you may find that filing for bankruptcy may help you rebuild your finances and regain control over your life in the shortest amount of time, but you may not know much about the process, or what it entails. Nowadays, the majority of personal bankruptcies involve Chapter 7 filings, but only those who pass what is known as the bankruptcy means test can file through this method.

Per Nerdwallet, the bankruptcy means test helps you determine whether you can file for bankruptcy through a Chapter 7, which is for lower-income earners, or if you have too much “disposable income” at hand and should instead consider a Chapter 13 filing. In a Chapter 13 bankruptcy, you must typically pay back at least some part of your outstanding debts, which differs from the typical process followed in a Chapter 7 bankruptcy.